Turn on the television, read the newspaper, or even read this blog and you’ll hear how hot the real estate market is. So hot, that many are saying this is the best year in home sales since 2006.
While many people are benefiting greatly from this surge, there are still people that find themselves “under water” on their mortgage or even far worse in foreclosure. According to CNBC.com there are approximately 952,000 borrowers in the U.S. that are 90 days or more past due on their mortgages.
We understand that every home situation and every mortgage is different. If you do find yourself in this unfortunate position, here are some things to keep in mind as you work your way through these difficult times.
Understand the Market
As we mentioned today’s real estate market is a healthy one. In years past, banks were much more likely to work with you on a solution for catching up on payments and finding a solution for affordability. Not so much today. Banks are willing to push foreclosures through because they know they can sell property fairly quick. With this in mind, you should not procrastinate when it comes to solving your problem. You’ve got to tackle it head on – whether that means a second job, help from friends or family, or re-negotiating your loan, do whatever is necessary to keep the issue front and center.
Know Your Options
In addition to talking directly with your lender about a loan modification, there are federal programs such as the Home Affordable Modification Program. This program was introduced in 2009 and has been recently extended. To date it has offered more than 1.8 million loans modifications.
Another less popular option is to move into less expensive housing. There’s a couple of different ways you could go on this route.
- Rent out your existing home if you can. See if you can find some renters to cover your expenses while you live in a less expensive place. If you can charge a little more for rent than the mortgage costs, then you could use the extra money towards delinquent payments. This would be an ideal situation.
- If you can’t rent your existing home then you may be stuck with a short sale, whereby the home sells for less than its worth, but it’s still better than foreclosure.
Do Whatever It Takes
Sadly many people in an “upside down” or “underwater mortgage” give up too easily and opt for bankruptcy and or foreclosure, because they see it as a fresh start or an easy way to escape. No matter what others have told you, this should be your very last option. Once your record receives a black eye like this, it’s hard to escape. It takes many years of sacrifice to overcome something of this magnitude.
The good news is there are ways for you to fight your way out, if you are willing. All it takes is a little knowledge, the right attitude and a plan of action.
EXIT Realty Bob Lamb & Associates is Murfreesboro’s most innovative real estate team.
EXIT Realty Bob Lamb & Associates
2630 Memorial Blvd
Murfreesboro, TN 37129
Phone: (615) 896-5656